Zillow stop buying homes (for now)

Ready2Downsize said:
I think they are permanently shutting it down, not just till the end of the year. 7000 homes they have to sell PLUS 9000 in escrow to flip.
https://finance.yahoo.com/news/zillow-shuts-down-home-flipping-200500342.html

Seen some really huge losses for them on some of their homes in AZ. Some homes were up for sale, didn't sell. Taken down and then sold to Zillow for ALOT more than they were asking. Now Zillow is asking what the seller wanted originally. Was looking yesterday and a couple were a 20% loss.

They took homes out of the hands of people who wanted to buy them to live in. How many people overpaid for their houses because of Zillow's speculation? I bet lawsuits are coming for that.

They deserve the losses. Same thing happened in 1989 when we were trying to buy a home and realtors were flipping homes. Worked until rates ticked up and buyers couldn't qualify. Lots of foreclosures for those realtors which of course took the rest of us down too.
Click to expand...

Is it me or was the Phoenix area the testing grounds for these iBuyers?  I remember reading that's where Opendoor, Offerpad, and Zillow started.
 
Liar Loan said:
Zillow Shuts Home-Flipping Business After Racking Up Losses
(Bloomberg) -- Zillow Group Inc. is pulling the plug on its tech-powered home-flipping operation after deciding that its pricing algorithms weren?t accurate enough to build a stable business.

The company plans to take writedowns of as much as $569 million and reduce its workforce by 25% as it winds down the business in coming months, according to a statement Tuesday. Zillow shares plunged as much as 11% to $76.22 on the news before paring the losses.

The decision comes as the company?s third-quarter results showed it lost more than $380 million in the flipping operation, called Zillow Offers. The business hit a major snag in recent months as the company?s algorithms caused it to overpay for houses just as the heated U.S. market began to cool slightly, forcing it to list properties at a loss.
Click to expand...

So Zillow had to learn the hard way that Z'estimates are not to be trusted.  ;D ;D ;D
Click to expand...

They outsmarted themselves and now will pay the price (literally).  I hate Zillow, they call me like once a week pestering me to pay for advertising on their website.  I've told them they have need me more than I need them and would hang up most times but a few times I asked them if they can guarantee that I would see a return on the proposed advertising spend...I got nothing but dead air and crickets with that question.  Trying to sell a sales guy, huh?  hahaha
 
USCTrojanCPA said:
Ready2Downsize said:
I think they are permanently shutting it down, not just till the end of the year. 7000 homes they have to sell PLUS 9000 in escrow to flip.
https://finance.yahoo.com/news/zillow-shuts-down-home-flipping-200500342.html

Seen some really huge losses for them on some of their homes in AZ. Some homes were up for sale, didn't sell. Taken down and then sold to Zillow for ALOT more than they were asking. Now Zillow is asking what the seller wanted originally. Was looking yesterday and a couple were a 20% loss.

They took homes out of the hands of people who wanted to buy them to live in. How many people overpaid for their houses because of Zillow's speculation? I bet lawsuits are coming for that.

They deserve the losses. Same thing happened in 1989 when we were trying to buy a home and realtors were flipping homes. Worked until rates ticked up and buyers couldn't qualify. Lots of foreclosures for those realtors which of course took the rest of us down too.
Click to expand...

Is it me or was the Phoenix area the testing grounds for these iBuyers?  I remember reading that's where Opendoor, Offerpad, and Zillow started.
Click to expand...

Could be. That area you can still find houses that will break even renting them because rents have gone up so much. Used to be that anyone could save up enough for a down payment and buy a house but that is over.

I don't know what is going to happen down the road to people who are renting and have little saved for retirement. One spouse dies or has major medical issues and there goes half the social security. Already people are having a hard time when their leases come up. I think there is a big huge problem brewing.
 
Ready2Downsize said:
USCTrojanCPA said:
Ready2Downsize said:
I think they are permanently shutting it down, not just till the end of the year. 7000 homes they have to sell PLUS 9000 in escrow to flip.
https://finance.yahoo.com/news/zillow-shuts-down-home-flipping-200500342.html

Seen some really huge losses for them on some of their homes in AZ. Some homes were up for sale, didn't sell. Taken down and then sold to Zillow for ALOT more than they were asking. Now Zillow is asking what the seller wanted originally. Was looking yesterday and a couple were a 20% loss.

They took homes out of the hands of people who wanted to buy them to live in. How many people overpaid for their houses because of Zillow's speculation? I bet lawsuits are coming for that.

They deserve the losses. Same thing happened in 1989 when we were trying to buy a home and realtors were flipping homes. Worked until rates ticked up and buyers couldn't qualify. Lots of foreclosures for those realtors which of course took the rest of us down too.
Click to expand...

Is it me or was the Phoenix area the testing grounds for these iBuyers?  I remember reading that's where Opendoor, Offerpad, and Zillow started.
Click to expand...

Could be. That area you can still find houses that will break even renting them because rents have gone up so much. Used to be that anyone could save up enough for a down payment and buy a house but that is over.

One of my kids is a teacher in AZ (one of the worst paying states for teachers btw). Got married, got their down payment together and could not buy a 2000 sq foot resale in a decent area. They kept getting outbid. Well probably because the zillows, opendoors etc bid them up. Finally one of their relatives sold them a rental they bought a few years ago as a private sale.

So all this "demand" there is really only half what it was because the flippers only intent was to sell it higher. Well, I will bet if houses drop there again, investors will buy them up to rent them out.

I don't know what is going to happen down the road to people who are renting and have little saved for retirement. One spouse dies or has major medical issues and there goes half the social security. Already people are having a hard time when their leases come up. I think there is a big huge problem brewing.
Click to expand...
 
USCTrojanCPA said:
Liar Loan said:
Zillow Shuts Home-Flipping Business After Racking Up Losses
(Bloomberg) -- Zillow Group Inc. is pulling the plug on its tech-powered home-flipping operation after deciding that its pricing algorithms weren?t accurate enough to build a stable business.

The company plans to take writedowns of as much as $569 million and reduce its workforce by 25% as it winds down the business in coming months, according to a statement Tuesday. Zillow shares plunged as much as 11% to $76.22 on the news before paring the losses.

The decision comes as the company?s third-quarter results showed it lost more than $380 million in the flipping operation, called Zillow Offers. The business hit a major snag in recent months as the company?s algorithms caused it to overpay for houses just as the heated U.S. market began to cool slightly, forcing it to list properties at a loss.
Click to expand...

So Zillow had to learn the hard way that Z'estimates are not to be trusted.  ;D ;D ;D
Click to expand...

They outsmarted themselves and now will pay the price (literally).  I hate Zillow, they call me like once a week pestering me to pay for advertising on their website.  I've told them they have need me more than I need them and would hang up most times but a few times I asked them if they can guarantee that I would see a return on the proposed advertising spend...I got nothing but dead air and crickets with that question.  Trying to sell a sales guy, huh?  hahaha
Click to expand...

Sounds like a "max rebate" problem.
 
USCTrojanCPA said:
Liar Loan said:
Zillow Shuts Home-Flipping Business After Racking Up Losses
(Bloomberg) -- Zillow Group Inc. is pulling the plug on its tech-powered home-flipping operation after deciding that its pricing algorithms weren?t accurate enough to build a stable business.

The company plans to take writedowns of as much as $569 million and reduce its workforce by 25% as it winds down the business in coming months, according to a statement Tuesday. Zillow shares plunged as much as 11% to $76.22 on the news before paring the losses.

The decision comes as the company?s third-quarter results showed it lost more than $380 million in the flipping operation, called Zillow Offers. The business hit a major snag in recent months as the company?s algorithms caused it to overpay for houses just as the heated U.S. market began to cool slightly, forcing it to list properties at a loss.
Click to expand...

So Zillow had to learn the hard way that Z'estimates are not to be trusted.  ;D ;D ;D
Click to expand...

They outsmarted themselves and now will pay the price (literally).  I hate Zillow, they call me like once a week pestering me to pay for advertising on their website.  I've told them they have need me more than I need them and would hang up most times but a few times I asked them if they can guarantee that I would see a return on the proposed advertising spend...I got nothing but dead air and crickets with that question.  Trying to sell a sales guy, huh?  hahaha
Click to expand...

Next time they call you, tell them. Hell Yeah, I would love to put my name on Zillow. How much will you pay me?
 
Cares said:
Pretium Partners picks up 2,000 Zillow homes to kick off iBuying wind-down
https://therealdeal.com/2021/11/10/...0-zillow-homes-to-kick-off-ibuying-wind-down/

I expect Zillow to do more large offloads like this instead of selling it back to the market. This isn't doing new buyers any favors as inventory is still locked up.
Click to expand...

Yeah, looks like the large rental company vultures will pick up the remaining homes that Zillow has so no additional inventory for sale because rents are also increasing.
 
Cares said:
Pretium Partners picks up 2,000 Zillow homes to kick off iBuying wind-down
https://therealdeal.com/2021/11/10/...0-zillow-homes-to-kick-off-ibuying-wind-down/

I expect Zillow to do more large offloads like this instead of selling it back to the market. This isn't doing new buyers any favors as inventory is still locked up.
Click to expand...

How can you lose in this favorable housing market with so much consumer and RE data and sophisticated algorithm in your armory?
Bad management.


 
Goriot said:
Cares said:
Pretium Partners picks up 2,000 Zillow homes to kick off iBuying wind-down
https://therealdeal.com/2021/11/10/...0-zillow-homes-to-kick-off-ibuying-wind-down/

I expect Zillow to do more large offloads like this instead of selling it back to the market. This isn't doing new buyers any favors as inventory is still locked up.
Click to expand...

How can you lose in this favorable housing market with so much consumer and RE data and sophisticated algorithm in your armory?
Bad management.
Click to expand...

ZEstimate?
 
Goriot said:
Cares said:
Pretium Partners picks up 2,000 Zillow homes to kick off iBuying wind-down
https://therealdeal.com/2021/11/10/...0-zillow-homes-to-kick-off-ibuying-wind-down/

I expect Zillow to do more large offloads like this instead of selling it back to the market. This isn't doing new buyers any favors as inventory is still locked up.
Click to expand...

How can you lose in this favorable housing market with so much consumer and RE data and sophisticated algorithm in your armory?
Bad management.
Click to expand...

The CEO set a goal of 5,000 purchases per month.  The only way to achieve that was to overpay for homes, so this really isn't the algorithm's fault per se.  He was trying to implement the high growth model that tech companies follow, which is forgoing profit in the quest for rapid growth and market share.  It works when you have a deep pool of capital and committed investors willing to sustain losses for many years, but it doesn't seem that Zillow had the financing they needed or a very well thought out plan.
 
Zillow's zestimate algorithm was incorrectly projecting future home prices. The ML model they had was fine until management started asking for manual overrides to screw things up. So I guess in a nutshell, bad management is the true cause of Zillows downfall.
 
tic, tic, tic...

As IHO astutely pointed out, listening to me could have saved $1 billion.

Opendoor CEO and president out as iBuyer shakes up executive team​

Weeks after it reported losing nearly $1B in Q3, leading iBuying company shook things up as founder Eric Wu was replaced as CEO by CFO Carrie Wheeler, and the president has resigned

www.inman.com

Opendoor CEO and president out as iBuyer shakes up exec team

Weeks after it reported losing nearly $1 billion in the third quarter, leading iBuying company shook things up as founder Eric Wu was replaced as CEO by CFO Carrie Wheeler, and the president has resigned.
www.inman.com www.inman.com
 
Liar Loan said:
tic, tic, tic...

As IHO astutely pointed out, listening to me could have saved $1 billion.

Opendoor CEO and president out as iBuyer shakes up executive team​

Weeks after it reported losing nearly $1B in Q3, leading iBuying company shook things up as founder Eric Wu was replaced as CEO by CFO Carrie Wheeler, and the president has resigned

www.inman.com

Opendoor CEO and president out as iBuyer shakes up exec team

Weeks after it reported losing nearly $1 billion in the third quarter, leading iBuying company shook things up as founder Eric Wu was replaced as CEO by CFO Carrie Wheeler, and the president has resigned.
www.inman.com www.inman.com
Click to expand...

Nothing to see here, they are going BK.
 
Opendoor bought these two homes around my area:

Purchased by Opendoor for 1.094m. Listing for 1.048m
https://www.redfin.com/CA/Lake-Forest/236-Siena-92630/home/182956332

Purchased by Opendoor for 1.034m. Listing for 1.065m
www.redfin.com

381 Bellver #13, Lake Forest, CA 92630 - 3 beds/3.5 baths

(TheMLS) Sold: 3 beds, 3.5 baths, 1711 sq. ft. townhouse located at 381 Bellver #13, Lake Forest, CA 92630 sold for $1,000,000 on Jun 20, 2023. MLS# 22-222961. Come see this charming home now on the market!...
www.redfin.com www.redfin.com

Good luck selling those for these prices! An attached condo went into escrow for 949k down the street.
 
sleepy5136 said:
Opendoor bought these two homes around my area:

Purchased by Opendoor for 1.094m. Listing for 1.048m
https://www.redfin.com/CA/Lake-Forest/236-Siena-92630/home/182956332

Purchased by Opendoor for 1.034m. Listing for 1.065m
www.redfin.com

381 Bellver #13, Lake Forest, CA 92630 - 3 beds/3.5 baths

(TheMLS) Sold: 3 beds, 3.5 baths, 1711 sq. ft. townhouse located at 381 Bellver #13, Lake Forest, CA 92630 sold for $1,000,000 on Jun 20, 2023. MLS# 22-222961. Come see this charming home now on the market!...
www.redfin.com www.redfin.com

Good luck selling those for these prices! An attached condo went into escrow for 949k down the street.
Click to expand...

Not sure who manages running comps for them but it's almost as if they are pricing it off comps that closed 3-4 months before the listing. Then these listings linger on the market and send up selling way less than what they paid for the homes.
 
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